run

I've been as busy as a hen on an anthill - doing lots of reading, trying to figure out what the heck is going on in this world. I don't have much of a clue, but that is okay - nobody else does either. I could write about what I think is going on, but there is a shortage of tin foil, so I will spare you from that for now.

The $700 billion bail out package in the States is more like $2 trillion, and it is probably much more than that. Goldman Sachs is purportedly using $7 billion of the $10 billion that they received for Christmas bonuses for the big-wigs. WTF? Same band, same song. RE continues to unwind, but things are sticky on the way down, or are they? Now, the "Obama Factor" is going to save Vancouver RE! The credit card companies keep cranking up my credit limit, and offering me 2.99% rates for six months - to go on a winter vacation, or buy Christmas presents, or consolidate other debt (that I do not have). Credit Crunch my eye. Condo projects are biting the dust in Vancouver, Toronto, Calgary...and there are big holes in the ground where the buildings were supposed to go up. So reminiscent of the early 1990s. Garth Turner is writing about squirrel meat and canned beans, shot guns and ammo (he is sounding jaded). I was squawking about a Depression 5 years ago, and people though I was nuts, but now it is in the main stream of consciousness. Have a gander at this video - from Fox News, no less. You have to love such an interview taking place in a bar.


It is all getting terribly repetitive. Deck chairs and icebergs and sinking ships. Gaack!

Most poignant quote of the day - Forget about gold – the ONLY precious metal is lead.

if the cap fits,

let him wear it



Wowza!

Did I hear someone say;

- The TSX closed at 9600 - down 4.5% on the day? That is just a measly 1/3 from the peak. Oil down, and the dollar down.

Batten the hatches, this is just the leading edge of the storm. The market was as over-valued when flirting with 15,000 as the RE prices were last May, so it is no big surprise. I feel that if things hadn't been messed with so much by scoundrels and fools, the TSX is about where it should have been. But it will see 6,000 or less before it turns back. (It might not ever do that.)



- Harper say to Peter Mansbridge that there are good buying opportunities in the stock market? For who? His mother? Does he not read newspapers? Have advisors? If he does read a paper, it must be The Stars and Stripes. His advisors must want to see him fail. Who calls an election without having a platform?

Harper is completely out to lunch, and it seems to be showing in the public sentiment. What foolishness will he utter next? Let them eat corn flakes!? His narcissistic nature leads him to believe in the Noble Lie, and that he is smarter than everyone else. He is clever, but that ain't smarts. Duceppe pinned him down in the debates. So did May. Layton openly laughed at him. Dion made him look like a chump.

When Mansbridge interviewed Harper, he swallowed hard a few times when Mansbridge threw the truths at him. Harper forced this election because he knew that the sheet-storm was coming, but it caught up to him, and he has blown it. $300 Million so that he could have an even smaller minority than he had, and my bones are starting to say that he might not even get that (so are some other commentators, I believe). There are around 20% of voters undecided the last I read, and I doubt they will go Cons. A coalition of the left is starting to look like a strong possibility.

- That 230 Canadian economists, teaching at Canadian universities, say that a carbon tax is what is needed at this time - even without the tax cuts? The Greens' plan would be even better, in that case.

What a sham. Harper looks the complete fool in this one. Cold, hard irony. Whap!

not pretty

original image

Yikes! That picture is horrible, but man, the meltdown.

TSX closed below 10K, and so did Dow Jones. The $850 Billion is now a trillion, with much more to come. It's all over for the US. We are not insulated, and all of our banks are exposed to sub-prime (probably even the co-op banks). Thanks to Paul Martin (and others before them) our banks don't have the reserves to cover their er, assets. There is always the CDIC, but what happens when they don't have the cash? And what happens when the guv doesn't have the funds to back CDIC? Ask Iceland. Their guv was on the verge of bankruptcy today, until the Russians helped them out. (I know, Iceland is Iceland, but they have great hot springs, Bjork, and some high-powered, but otherwise unintelligible, bands.) A while ago I revised my TSX forecast to 6,000 from a previous forecast (Jan. 2008) of 8,500. I am wondering if that was too generous.

Mansbridge did a wicked interview with Harper tonight. He's (Harper) goin' back to the NCC next month. Christmas in a condo in Calgary. Comfy with a nice cerulean cardigan.

Building permits are down 18%+ in Vancouver. That is about $650 million out of the local economy. Things are unwinding fast, and big. I have more to rant about, but it's past my bedtime, and I'm tired and grouchy, and want my blankie. Manana.


search for Nancy W.

alliteration under the volcano

Vesuvius 1822

Wow, the shite is hitting the fan. Lots of talk about 1929, global depression, doom, gloom, and despair - and that is just the MSM! The commentary runs from the apoplectic, to the apocalyptic, to the apathetic, to the apologetic - and that is just the A's! I thought that I ought to add to the mix with some brimstone, bitter nettle, bone heads, and just a little braying.

Speaking of boneheads;



The picture is from this article - a nice synopsis, and I redact;

Let's take a look at America 's...entire financial system...in the process of blowing up...over $500 billion in bank losses, with over $1 trillion more to come. Over one dozen banks have failed, with hundreds on deck. A handful of large hedge funds have blown up, with hundreds more on the way...over $1 trillion has been transferred from the Fed to the banking cartel...estimate another $1.5 trillion will be needed to maintain liquidity as banks de-leverage over the next few years. Unemployment is now over 6% and inflation is over 5%, even with Washington 's manipulation of the data. Virtually every metric in the housing market is at multi-decade lows, except for foreclosures which are hitting new highs.

Taxpayers are on the hook for billions of dollars of potentially worthless debt held by Fannie and Freddie. It's now official. America 's free market economy is really a socialist system for corporations. One could argue this to be a form of Fascism. My best estimate for losses due to the Fannie and Freddie taxpayer bailout are between $200 to $500 billion. The worst case scenario would be $800 billion. When Superman fails to show up, Washington might consider giving David Copperfield a call. Get the popcorn ready.

Those clowns up there are the architects of all of this, but they won't be affected by it, they have made out like foxes in a hen house. My rough estimate of the debt that 330-odd million people just accrued (whether they wanted to, or not) is tens of thousands of dollars each, and that does not count the wars, and such. All to bail out banks, mortgage companies, and insurance companies whose directors and CEO's collected tens of millions of dollars in bonuses. AIG alone cost $2575 per man, woman and child. Sounds fair to me! Everybody loves an insurance company.

And yet more clowns, chimps, chumps, cheats, whatever (I promise not to go through the whole alphabet).

The mental midget. The picture says it all - RESPONSIBLE. Responsible for 0%/40 year mortgages, responsible for blowing the surplus, and very likely for putting the gov't into a deficit situation. Responsible for leaving a $5-6 billion deficit in Ontario after just one term as provincial finance minister. He is no economist, or financier, he is a lawyer. Let us not see the likes of him return to the finance portfolio.



Heil Harpler. (complete with lip-stick on the pig)



What an unfortunate (if defining) photograph of this clown. I find it hard to believe that he has pulled the wool over so many people's eyes (as evidenced by poll numbers). Have Canadians not been paying attention to the chimps in the first picture these last 8 years? I find that to be very disconcerting, though I ought not to be surprised; after all, so many Canadians drank the RE kool-aid, I really ought to have lower expectations.


The picture above leads right into the photoshop below, though instead of looking like an evil dictator, Harpler ends up looking more like the incompetent Sgt. Shultz from Hogan's Heroes. I really hope that people wake up in the next 3.5 weeks, and get rid of this prick for good.



Things are not looking so good. I predicted back in January that we would see the TSX back at 8,700 before this is all over- I am now revising that to below 7,000. I also predicted that we were heading to a depression (in 2005), and now the MSM is predicting the same thing (that is my braying).

Good luck everyone, I hope that you don't have debt, and do have lots of savings, you are going to need it.

More reads -

The Ultimate Wall Street Nightmare

more gloom

unintended consequences

Vancouver leads fall in house prices

So much to write about, and so little time...

888 state

Yesterday I was out and about, and noticed more "For Sale" signs than I have seen for a while. It seems that there are 4 or so on every block. It seems that it is sinking in that it is over.

My neighbour has had open houses the last three week-ends in a row. It seemed that it was mostly Chinese looking (I can tell the difference between Chinese, Japanese, Korean, etc. 19 times out of 20 +/- 3%). No Mercedes, Lexus, BMW, mostly small, less expensive vehicles. Maybe that indicates they are more frugal, and can afford a $900K house on a smallish lot in East Van.? Maybe not. I enjoyed doing yard work while my stereo pumped the Sex Pistols, The Ramones, Forgotten Rebels, etc., out my window. Hey! fore-warned is fore-armed. Right? The asking price is 20% higher than it was bought for last year. And the defects are starting to show. Good luck with that.

So, I was all juiced up, and did some MLS searching. Still no houses in East Van. under $400K. I guess we will have to wait for fall for things to sink in. Prices and quality are all over the map, with tear-downs listed in the same price range as new construction, and big lots in the same range as small lots. A little price compression before the price depression sinks in, me thinks.

What I found interesting was all of the houses listed with a bunch of eights. I counted 10 places (out of 160 or so) that were listed for $888K. That is kind of blatant, and if I were Chinese, I would be somewhat offended. Do the listing agents think that they (Chinese) are that stupid/naive/superstitious? You would not want to mess with over/under bids on a place that was listed for $888,888.00 would you? I'll give you $888,888.88 plus my lucky rabbit foot. No Deal? I'll throw in a four-leaf clover!

Sadly, many who over-extended themselves to buy in the last couple of years - with the hopes of insane appreciation - did not see the credit crisis, doubling of energy costs, accelerating property taxes to pay for Olympic cost over-runs, food inflation of 30%, etc., coming when they factored their top line.

Why don't we just start bidding $300K with a bunch of conditions on these $800K places? Let us bring it down!

There are deals ahead. Keep your powder dry.

updating utopia

I wrote in January 2007 that The crazy weather has the environment on everybody's minds, and gov'ts will react. Whether (no pun intended) they react with vision remains to be seen.

Since then, they have reacted with some vision; the provincial Liberals have enacted a carbon tax of 2.4 cents per litre of gasoline, which takes effect the day after tomorrow. Is it too little too late? We got our cheques (and cashed them), but rumour has it that there is a fair bit of backlash, and Campbell is wavering. I'm not giving my 100 bucks back! The federal Liberals have also proposed a carbon tax, and are taking it as an election platform.

Personally, I don't understand all the crying - energy prices have sky-rocketed beyond imagination all by themselves (thanks to speculators?), and it is just going to get worse before, and if, it ever gets better. I figured out the other day that we spend 8.73% of our gross income on fuel for our vehicles. Ouch. We need the one gas pig for business, but my 17 year old 6 cylinder pig could use replacing with something of greater efficiency. Can someone spare me $40K for a Prius?

So what does that mean for the city? Less cars on the road (or more energy-efficient cars...), less pollution - lower insurance premia? It will probably mean more densification as people move back into the city and the emptying of suburbia. Back to small, self-contained towns. But what about employment? Vancouver has been hollowed out as far as jobs are concerned - fewer office buildings in the core as companies have moved out, and condos replace them. So what kind of economy will we have? Tourism is returning to the ambit of the affluent, so low-paying service jobs will be lost too. If it wasn't for the pending lack of employment, I would venture to say that property values would actually increase as people move into the cities.

Things are going to get harder before they get easier. With escalating food prices, more people will be turning to produce their own food in their gardens, so we may well see the end of manicured lawns, and litle-used streets may well be turned to food production, infill housing, etc. The only comment on that January '07 post was someone who said that my utopian view of the Vancouver of the future could not happen because of all of the sewers, fibre optics cables, power, water mains etc., that run under the streets, but those are quite deep for the most part, so tearing up the asphalt and planting corn will have little to no effect on that aspect. What about police, ambulance, fire services? We could keep the alleys as they are and tear up the streets for infill housing, gardens, etc. Condo dwellers are going to face a bit of a challenge to grow their own food, so maybe more community gardens in parks? Allotments are old hat in Europe, why not here? The skies will be quieter with much less air traffic (and less chemtrails?!).

It looks like the USA might not be wanting the dirty oil from the tar sands very soon, so it will be interesting to see what happens to Alberta, I suppose China may want to buy it though.

Speaking of China, with the rising cost of transportation, it will soon be uneconomical to import everything that we wear, computers and electronics, etc., so there will be opportunities to start producing what we use here, and that will recreate jobs that have been lost to globalization.

There is a time of transition ahead, and that will not likely be smooth, but in the long run, we will likely be better off, and living much simpler, and hopefully, more meaningful lives. I read a good book some years ago called The Fifth Sacred Thing. It was an interesting and idyllic look at how we would live post-oil economy. It sounded great.

From that January 2007 post, here is a link to some of the ideas for a more livable city. It is a good start, and was produced before energy prices went hay-wire.

low-pressure trough

Bear-Stearns price graph.

A low-pressure trough is sometimes called a depression. I have been talking of an impending depression for years (not here, but elsewhere, and verbally). Most people just thought that I was a crank, but it is starting to come to fruition.

Bear-Stearns was trading at around $70/share last week, but today, sold off the whole shebang for $2/unit. I'm sure that a lot of people thought that BS was different. Bear-Stearns is just one banking house in trouble, there are more to come - by all accounts.

I know that a high CDN dollar is problematic for exports to the US, but our dollar slipped below par today. That is bad news for us. We do not want to follow the US to the bottom, but it appears that we will. All those fools that bought RE at exorbitant prices in the last few years are going to be in big trouble when the carbon tax comes in, property taxes sky-rocket to pay for the Olympic scam, TransLink is putting in a new tax, Hydro rates to increase some 25%, job losses coming soon, etc.

Here is an interesting article at rense.com proclaiming that Black Friday is back. The article is a bit long to keep one's attention, and is kind of spectacular in writing style - it is also aimed more at the US reader, but there is some stuff of interest about halfway through.

There is one more player in this quagmire of failure and defeat that has yet to show its face. That is the face of those that have supported all this criminality and horror with their greed and with their interminable silence throughout this most treacherous chapter in all of American history.

These are the would-be emulators of those in power, regardless of how corrupt or jaded the individual criminal-figures might actually be. These are vulture capitalists in-waiting, not yet fully fledged, but still very eager to find a way to get their own piece of the corpse that was the USA. They are the reason that so many have remained silent and complicit with all that has transpired. In reality these seemingly ordinary people, have made it possible for the owners to get this far without a violent public backlash.

Now while the real players have begun to pull their money out of everything, it is these small-time opportunists who will be left with nothing, because they weren't smart enough to get out before the major dominoes began to fall. Now they, along with us, will be left holding the bag and screaming about "what could have been!" Because whenever any major 'bubble' bursts, the key players not only escape, but they always have made huge new fortunes from each new chaos-while the suckers lose it all.

This time there are literally millions of suckers that did not study the Stock-Market Crash of 1929, so they've just been waiting in the wings to be crushed by this burden: which was always part of this design that was created to insure that this failure will be total!

The lesser beings that sought to profit..."believed implicitly" that they would end up on the winning side with their own smart-money profits as a bonus. But re-born Robber-Barons do not suffer fools or casual opportunists-instead they eat these 'hangers-on' that would have cluttered up their kill. So, once again only the few will profit, while all the rest of us will pay because 'the run on the banks' has begun and the Fed can't print money fast enough to stop this, if it reaches beyond the business class and into the general population. (emboldening and clipping mine)

I think that Rense may be a bit sensationalistic - like Alex Jones, but still speaks to the truth.

Things are going to get nasty. Forget schadenfreude, we are all going to hurt. Get rid of debt, and stash some cash while you can.

staying the course?

I stayed the course. I didn't sell anything on the markets this week, even though I have been tempted to do so for the last year. There was a free-fall this week, and then some wacky correction type action today. Volatility is not good. No one really knows what's up.

BCE has a sale agreement with the Ontario Teachers' Pension Plan for $42 something a share, yet BCE is selling for about $32 right now. OTPP says the agreement stands, and it is staying the course. The Big Banks are offering discounts on new shares releases too.

The US gov't is staying the course with crazy attempts to stave off the inevitable recession until that little redneck GWB is done in the WH. I guess he is trying to protect his legacy of fucking up anything that he touches.

What about you? What course do you see ahead for yourself, and for the larger world?

how low can she go?

I've been up to my arse in alligators, hence the lack of pies.

I stole the image below from Garth Turner's blog posting Pop Heard Around The World. (don't think that he didn't lift it from somewhere) Politically, he's...well anyway, he is telling it like it is vis-a-vis the economy, and some of the comments are good too. It's kind of like wading through comments at Rob Chipman's , but there is stuff worth reading.



Look at that down slope. Pretty steep. And the timeline - aren't we "two years behind the US"?

This is it. The Wile E. Coyote moment has passed. How about that 600 point drop on the TSX today? And the 900 points off last week? That is some 12% down in seven days. My stock list is a sea of red - except for the ones that have Halts on them :[

Oil down below $90. the CAD below .97. Quebecor up shite creek in a lead colander.

Some are talking about TSX below 12,000, try below 10,000. The rout is global. Look for 8700. Then buy. Rinse. Repeat.

Oh, and house prices? How low can she go?

I know that we are immune to everything, elsewhere, but I am in Vancouver, and I'm watching my stocks go down. And I thought that I was different. It's so great to be living down a rabbit hole in The Land of Oz.

Here is some light reading at the Gloom and MarketCrash

And just to round things off -

the quickening

There is a lot going on these days, despite the "roaring silence" that has been for a while. drachen linked to this video over at mohican's place. The collapse of the US dollar and economy, and perhaps US society? They are going down, and we, and a good part of the world will be going down with them.



Mike Mc sent this link from July 28, 2005 warning of a bubble in Vancouver and Victoria (thanks Mike). That was 2 1/2 years ago, and things have continued to inflate since then. It is now so out of whack that it has become like a lost chapter in Through the Looking Glass.

Today we hear that the Provincial Guv'mint is talking about a roughly 14 billion $ transit initiative. Just tack it on to our property taxes on top of the infrastructure costs for the boondoggle. I mean, Olympics.

Meanwhile, Surrey NDP MLA's are calling for Translink to roll back the latest transit fare hike.

"You can't have someone who makes $8 an hour have an increase in a fare and end up paying something like 18 per cent of their income on transportation. It's just not fair."

Too true. After coughing up 71% of income for mortgage payments, and 18% for transit, there will be a scant 11% left for food, entertainment, clothing, retirement savings, property taxes, up-keep, etc. Does anyone know if those percentages are net of tax?

Stephen Harper announced a billion dollar fund to help displaced workers in the manufacturing and forestry industries.

The rising Canadian dollar and an economic slowdown with Canada’s biggest trading partner, the U.S., has forced many mills and factories to either let workers go or shut down completely. In response, the Harper government has announced a plan that is not only ludicrous in its approach but politically underhanded as well.

I guess Stevie is worried. But a billion bucks is not going to cut it once things really get going.

The sell/list ratio over at Rob Chipman's place has gone from 200-odd % before Xmas to 30-odd %, and we are not seeing regular #'s there these days. (some might say that the Chipper is withholding because the #'s are grim. I don't buy that, but if the #'s are grim, who will be surprised - besides the greater fools?) Seasonal, or harbinger?

I had a whole bunch more interesting links, but I will not travail you with them now. The shite is hitting the fan in dribs and drabs, but it is quickening.

happy new year!

Here we are at the eve of a new year. It has been a good year for me, with the arrival of a bundle of joy, and the accompanying patter of little, bare feet. The RE correction so long anticipated has not come to be realized, but, oh well. Maybe in 2008?

I would like to interrupt myself here to thank each and every one of you that have made this humble little blog a continuing interest and joy for me to write. Over 190,000 hits in the last year. So much more than I could have hoped for when I undertook the production. Thank you for sticking with me when I have under-produced, ranted, and occasionally been snarky. And thank you for the decorum exhibited through it all.

I hope for the very best for all of us, everywhere - bull, bear, ambivalent, home-owner, renter, homeless, but I do hope that all the specuvestors get burned (just kidding...sort of). I believe that we have huge challenges coming to us in the near future.

I picked the picture above because it seemed to have many pertinent elements - a sign warning of a fork in the road, a character (specuvestor?) with a target on his hat, and a generic, uninspiring metro backdrop.

trotter made a few predictions in the last post, which I will bring over here to open up the commentary. Feel free to post your own predictions, rants, kudos, kvetches, etc.

I predict a steady slide in prices beginning in February/March, much hand-wringing and recriminations, a few bank collapses, a stock market crash, and my own committal to a nut-house near you.

Have a happy, healthy New Year. My resolution is to be a bit more regular in my postings.

Let the prognostications begin!

blake, i'm not

Yesterday's post was a bit feeble, but what I meant to express, was that things are unhinged in all sectors. There are massive amounts of money-cum-credit floating around, and it is hard to tell the difference. I think that it tends more to be credit, and that is what I was getting at about "selling ourselves". I heard (or read) some time ago that credit is now the most dominant market and would continue to expand. As long as central banks keep propping up the sickness that pervades, that is easy to understand. Mutual funds, hedge funds etc. have been knee deep in extending credit, and trillions of dollars in bad loans got wiped out of peoples' portfolios. Who are the winners?

On another note, I wandered into charles hugh smith's - Two Irresistible Reasons Housing Will Retrace to 1997 Prices and ripped off what is below. I don't know just how he arrived at his conclusions, but the Japan graph is striking.

The one thing that is not often taken into account is world population. In 1950 there were about 2.5 billion people on earth, now we are heading for 7 billion. While billions of those are living in abject poverty, many are enjoying previously unknown prosperity. So, is it possible that historical ratios just don't apply any more? Is it really different this time? (Wikipedia suggests that in 1999 North America had 5.1% of the world population, and that will fall to 4.4% by 2050 - when the world population is projected to be 8.9B)

Nah. I don't think so. I don't reasonably expect 1997 prices before I buy (2017?), I want to watch trees grow, and I am not that cheap. I'll settle for 2003 prices.

Here's an excerpt of what chs has to say. Read the whole article at the link above. It's interesting.

Speculative bubbles in the stock market tend to shoot up and then plummet in relatively short time spans. Here we see that the dot-com era bubble in NASDAQ took a mere 3 years to reach euphoric heights in which risk was banished, and a roughly similar length of time to give up all the bubble's gains, and then some.

Real estate trends stretch out over much longer time spans, and as a result we can foresee a lengthy, painfully drawn-out decline in housing values over the coming decade.

Just as stocks break free of fundamental metrics of value in speculative manias, so too do houses. But just as stocks retrace to historical levels of price-earnings ratios, so too will housing retrace to historical levels of income-to-value ratios. Historically, this is about 3-to-1: long-term, houses cost about 3 times household income. Since the median household income in the U.S. is about $46,000, U.S. incomes would support house values of about $125,000 - $140,000.

As I have noted before, my parents/step-parents each bought houses in highly desirable locales in the early 70s (Honolulu and Pasadena) at 2:1 (twice annual income) and 4:1 (four times a schoolteacher's annual income to buy in highly desirable Manoa Valley in Honolulu.)

As recently as 1997, friends were purchasing small homes in very desirable S.F. Bay Area communities for $160,000 - $175,000--four times a modest (for this area) household income of $40,000.

In other words, to return to a normal trend line, one that was in place a mere decade ago, even the most desirable areas will command no more than 4 times median income. That would put house prices in Honolulu, the S.F. Bay Area, West L.A., Connecticut, Northern Virgina, etc. at about $180,000 - $200,000 -- not $600,000.

Thanks to cheap realty for the link to chs.

collapsing?

OK, this is anecdotal, but I wonder if it is a sign of the beginning of the end.

My "neighbour", whose property I have written about here, here, and here (and maybe a few other places), told me today that his deal to sell his house had collapsed. It seems that the RE agent (he is also an agent) who was going to buy his place for $795K, has backed out of the deal because the person that was supposed to buy her place (another realtor perhaps?), couldn't sell their place (and so on).

The price point is in the high "low end", so I wonder if this is a sign of shaky knees in the market. Finally.

I must say that I do have a certain schadenfreude about it, as I and my family have been living in a construction zone for the past 9 months. Flat tires, noise, damage to my (rented) property, etc. It is unlike me to have those types of emotions, but...

It will be interesting to see if he can flog it without losing too much money. I will keep you up to date (whether you are interested, or not), and will probably feature the monster in the curb appall series.

ADDENDUM:

So, the BoC hiked rates by a quarter point today, and the reaction was interesting. I don't know if it was a reaction, or just the normal inscrutability of the markets, but the Dow was down, TSX was down, and the dollar was down a half cent. I don't know about oil. It was interesting to me that the dollar actually went down.

The BoC is kind of stuck - with over a quarter million jobs lost in the Ontario and Quebec manufacturing sectors in the last three years (some 39,000* jobs lost just in June), while the West continues to be smoking hot. Alberta is hot on oil and gas, and BC is hot in ...construction (those Microsoft jobs are meaningless in my HO).

The housing market in the US is still in the process of shaking itself out, and I think that it is starting here.

I wonder if rates will rise again in September. I'm not sure that they will, because the East is kinda hurting, and receives more attention in these things than does the West. It's further interesting that the East has lost so much with rates low - that should have dinged the dollar a while ago, no? (presuming that it was the high dollar hurting exports)

I have a feeling that things are about to get really interesting. The bankruptcy rate is double what it was a couple of years ago, and it won't be just mortgage rates going up. How about all those HELOC's, LOC's, credit cards, etc. being hiked too.

Gotta go and pay off my credit card, and look for the best plan for my cash.



*working from memory - it might have been 31,000 jobs lost in June.

I grabbed the picture from this blog - red guy blue state - who grabbed it from somewhere else. The red guy is blogging on RE in the US, and is worth perusing.

I like the "Doh!" take on Munch's The Scream, which I have used somewhere here before.

down the memory hole! the bliss of anonymity.

Well, I wasn't sure that I would get to post today, but I ended up reading something of interest, and, well, ...

I'm going to exerpt a few things that jumped out at me.

Forecasting is hardly an exact science.

Many professional watchers were just as surprised as the rest of us by last year's sizzling housing market performance.

...preliminary numbers put out by The Real Estate Board of Greater Vancouver for 2006.


So what can we expect for 2007?

Three experts who watch the local real estate market very closely...predicted that housing prices will go up again this year but only by 8% or less.

Seems that they haven't noticed the declines and low sell/list numbers yet. And come on - only 8%? That is still double the historical, long-term YOY gains.

Home sales are decreasing and it is taking longer to sell. Why?

Errm, maybe this has something to do with it -

The Royal Bank of Canada released its Housing Affordability Index in December and not surprisingly, Vancouver has the highest index in the country. It now takes 75% of "median pre-tax household income...
" Unless people have a huge increase in earnings, it's going to be difficult for people to step and pay more."

I think that they may have been doing some reading over at VHB. That same argument has been made there for the last year or so.

...interest rates dropped and buyers found they could carry bigger mortgages for less.

Until the rates go up, and the value of their asset falls. Ooops.

Builders scrambled to meet the demand and now a lot of that pent-up demand has been met.

And more, I'm sure. But the "pent-up demand" part kind of stumps me. I believe "instilled (by marketing) demand" would be a more accurate turn of phrase.

Affordability is making it increasingly difficult to pass on...costs to consumers.

On balance, there is still enough of a demand to push up prices slightly. Canada Mortgage and Housing Corporation is predicting a 7% increase on average. It says demand will be fueled by a strong provincial economy, increasing wages and an additional 45,300 people moving here.

Well, it wasn't Cam who said that. I think he may have left his cue cards in his desk for his successor.

...a more balanced market will discourage speculators from buying up several pre-sale apartments at a time, hoping to flip them for a quick profit once they are built. She also says the days of lineups and sellouts of condos may be behind us.

That is so 2006. Do you smell coffee? Good Morning!

There are plenty of others who are not as optimistic for 2007. Discussions in local housing market blogs predict sharp price decreases for the year ahead, although some writers admit their predictions for 2006 were far too pessimistic.

OK! OK! Mea culpa X 3. (smug bastidges)

Should you buy if you can afford it? Both Hennigar and Pastrick say the long term prospects look good for real estate, barring any unforeseen shocks. Short term buying and selling do not make sense however, if prices only go up 6 or 7%, that might not be enough to cover your taxes, real estate and legal fees.

I dunno. Is that bearish? Or just non-commital? I think the latter. The MSM still does not want to stick it's collective neck out too far, it seems. Can't blame them, I guess. Relative anonymity makes that much easier to do. I'm calling for -17% to -23% by September (any of my earlier predictions are as meaningless as this one).

If worse comes to worse, I can just delete this whole blog and disappear down the memory hole!

The article exerpted above can be read in it's entirety at the CBC link up top.

I'm bullish on this real estate!

The Bedroom...

One day perhaps, we will all make it to the Moon. But given that the trip is probably not imminent, we thought you would enjoy a picture of what the view out of your bedroom window may one day look like. Here it is: (moonshop.com)

Back in December I wrote about the next boom in real estate here. At that time, NASA announced plans to build a permanent base on the Moon. The idea is to have a base that can be used for further forays into space (Mars is on the agenda), and to facilitate the exploitation of resources present there. One of those resources is Helium3, which can be used in nuclear fusion to provide clean energy here on Earth. With oil taking such a precipitous tumble this last week, people may be thinking less of alternative energy sources. But that's not the end of it - not by a long shot.

There is a group called The Lunar Embassy selling plots on the Moon. You can buy one, I can buy one, anyone can. The "Head Cheese" of the Lunar Embassy is a guy named Dennis Hope, who in 1980 went to his local US Governmental Office for claim registries, the San Francisco County Seat, and made a claim for the entire lunar surface, as well as the surface of all the other eight planets of our solar system and their moons (except Earth and the sun). Obviously, he was at first taken for a crackpot, until, 3 supervisors, 2 Floors and 5 hours later, the main supervisor accepted, and registered his claim. link Is he a crack-pot? A pot-head? A crack-head? Can't say, but he purportedly was awarded a Prestigious Republican Gold Medal for his derring-do. It's a pretty bizarre tale all-in-all, but the guy does seem to make sales, so he is making money. He even charges a "lunar tax" on all purchases.

Now supposedly, NASA has said that Mr. Hope has no right to sell these plots, but it seems to me that the UN, Russia, US, have made no objections, and as stated above, Mr. Hope purportedly won a gold medal from Congress, so who the flak does NASA think they are? netcheck.com (the Better Business Bureau for the Internet) says that they are legitimate, and Moonshop reports that a couple of Presidents of the United States are among over 1700 satisfied customers. They have a plethora of items for sale (besides Moon plots), but here is what 1 acre of prime lunar real estate will cost you -

Prime View Lunar Properties (1 acre)
Normal Deed US$ 19.99
+ US$ 1.51 Lunar Tax (tax payable only once)
Shipping and Handling are: US$ 12.50 (For up to 5 of them, going to the same address).

Like any realty company interested in moving product, they are even offering incentives - in the form of a brand new Chrysler Prowler to be won (they don't say whether they will deliver that to your lunar address). You can even buy a "town site" of some 4400 acres for a paltry ~$5500 US.

It sure does sound crazy (it will cost you about $900 million dollars for a charter flight to the Moon), but what if space travel becomes popularized, and the costs drop? Wouldn't you feel silly? If there is Helium 3 on/under your patch of the Moon, you could be a zillionare if you only but plunked down ~$20 US. Just don't forget to claim your mineral rights.

I'm pretty bullish on this RE. I might just buy 5 acres. I may not get to walk it (I wouldn't really want to), but my great-great grandchildren might think that I was a pretty adroit investor 100 years down the road.

Note - this guy has also laid claim to all of the planets and moons in our solar system - with the exception of Earth...

Finally - sorry to disappoint anyone who waited two days to find out what "the next big thing in RE" is - expecting that it might be Naramata, BC, or Flin Flon, Manitoba, but I've been up to me arse in alligators, and there's nothing like a little suspense!

Houston - there is no problem. Over and out.

an utopian ideal

I heard a fellow speaking on TV a few nights ago who was making New Year projections, and he went further than just 2007. Some of what he said was whacky - which got my own whacky ideas going. He spoke of peak oil (yawn), but one of the things he said was that he believed that by 2020, the personal automobile would be but a memory. Being that I had just posted in a nostalgiac vein, I mentally rambled around that idea.

I can't remember as far back as the time when most urbanites had not personal vehicles, but it wasn't that long ago, and it is more of a North American phenomenon anyhow. So I wondered - would I be able to live comfortably without a vehicle? No, I would not. Why? Because transit sucks in Vancouver. It really does, and the gov'ts have no readily apparent interest in solving that problem in an effective manner. The RAV line is a case in point. I won't rant about that here - because I'm going off-topic on myself... Maybe we will all have electric buggies of some type - I don't care - so long as I can still get around effectively.

Now, what if we reclaimed all of the venal residential streets and built in-fill housing on them? Perhaps give the landholders on those streets the opportunity to buy the land in front of their homes from the city and build small, affordable homes on them? The City could retain title to the sidewalks and boulevards to maintain access. Streets are 33 feet wide, which is a standard lot width. It would hopefully create more green space too, and the city would save millions every year on street maintenance. The laneways would be retained by the city for services - and for yer electric buggy. The money raised from land sales would be put towards an effective transit system a la some exemplary European and Asian cities.

I photoshopped the above pic as an amusement - to help me envision such a street. The result would be world class. We would attract the best of companies to situate their head offices here. Land values would be stratospheric. This city would become the most desired place in the world to live. I'm writing the copy in my head now - The bold can move to Mexico City or Detroit. The smart, peaceful, content money lives in Vancouver - The Garden Paradise on the Pacific.

It seems extreme at first blush, but the City already has some vision of a liveable city, and changes will come whether we like it or not. In the long run, I think we will like it.

The crazy weather has the environment on everybody's minds, and gov'ts will react. Whether (no pun intended) they react with vision remains to be seen.

uncertain buyer

uncertain buyer has joined the blogosphere. The link is in the sidebar to the right (bc housing blog). Go on over, and check it out.

uncertain has sold, and is now trying to decide to get back in, or wait.

Welcome uncertain buyer! (and congrats on the sale)

wake me in the spring

Well, not much seems to happening here. There is a change in the wind, but the market seems to be asleep. No one has a clue as to what will happen, but it seems as if things are finally turning around. There have been some remarkable price reductions, but the prices have been so remarkable, that's not saying a lot.

It's hard to make sense of what's happening by looking at Rob Chipman's numbers (for me, anyhow), but Rob is starting to sound a bit bearish (no slight intended Rob). A few choice quotes from his blog - "half full/half empty? These days I'm tending to think half empty", and, "I don't see increased strength in sales in the New Year." and, "I see the current market as ominous (certainly not as in "worse than 1981", but still, ominous)". Rob is accused by some as being biased, and even dishonest, but I don't agree with those assertions. I think that Rob has been pretty objective, and is still thus.

Set your alarm clocks for the spring, and the bulls/flippers/speculators ought to be prepared to be very alarmed - in my humble opinion. A rude awakening is in the offing.